News in depth BY XOLISANI NCUBE
Fresh revelations indicate that President Emmerson Mnangagwa’s cronies allegedly pocketed millions of dollars by manipulating the farming inputs prices under the government-sponsored command agriculture scheme, which the Office of the President and Cabinet monitored.
Last week, parliament’s Public Accounts Committee (PAC) led by former Finance minister Tendai Biti claimed that US$3 billion that was allocated to the command agriculture scheme between 2017 and 2018 after Mnangagwa succeeded ex-president Mugabe in a coup, could not be accounted for and might have been abused.
But Biti and PAC are yet to provide a concrete breakdown of the US$3 billion or back it with substantial proof.
The scheme was modelled as a public-private partnership (PPP), where the financier directly paid suppliers for inputs that were drawn by farmers, who would then make loan repayments through grain deliveries to the Grain Marketing Board (GMB) depots on a cost-recovery basis.
An official report by the Auditor General’s office that has been tabled in Parliament indicates that in 2018 alone, the command agriculture scheme received more than US$353 million for a maize and soya programme, and above US$58 million for last year’s winter wheat season.
Government claims it issued treasury bills amounting to US$500 million only to a private partner, Sakunda Holdings, for the procurement and distribution of farming inputs for the 2016-2019 special farming scheme meant to boost agricultural production through inputs loans to farmers.
PAC recently revealed that money allocated for command agriculture was released to the Agriculture ministry yet there were no supporting documents, while Parliament did not approve it.
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Close sources, though, told The Standard that the ministry was merely the implementing partner while the money was handled by the Finance ministry, the Reserve Bank of Zimbabwe and Sakunda Holdings, one of Zimbabwe’s fuel suppliers which was mandated with sourcing and distributing farming inputs under the command agriculture scheme.
Sakunda received an advance payment of more than $182 million.
The permanent secretary and the finance director in the Agriculture ministry told PAC during a recent parliamentary hearing that they had no clue how the money was used and that the Office of the President and Cabinet was the one that monitored the project.
Chiri reported that she was denied access to the loan agreement between the government and Sakunda Holdings, the supposed financier of the project, in violation of Treasury Instruction 1216 that obligates public entities to do so.
And a six-month investigation by The Standard, working in partnership with Information for Development Trust, a non-profit media institution focusing on corruption and public sector governance, was told of how Mnangagwa’s alleged crony, Kudakwashe Tagwirei, led a cartel that allegedly siphoned big money from the project through a calculated scheme that involved inflating prices of inputs.
Tagwireyi, hails from rural Shurugwi in the Midlands province, a district that neighbours Mnangagwa’s Zvishavane home area, and he heads Sakunda Holdings.
According to reports being investigated by Parliament’s Agriculture Committee, the cartel reportedly comprised Tagwirei, a named former director at the defunct Kingdom Bank, a senior employee at SeedCo who commanded the supply of inputs, a brigadier in the army and several other players.
The majority of the members of the syndicate, it was revealed, are members of the Seventh-Day Adventist Church who congregate in Borrowdale in Harare.
In 2018 alone, sources privy to the scam said, the cartel pocketed some US$18 million through the inflation of prices.
Sakunda officials selected the suppliers and chose SeedCo, a leading producer and marketer of seed, to supervise the procurement of inputs, while Sable Chemicals supplied fertilisers.
The pricing model under the programme was different from the general market as inputs under command agriculture were pegged at higher prices. Employees of smaller suppliers confirmed this and claimed that SeedCo managers boasted that they were the “kings” of command agriculture.
During this period, fuel coupons availed by Sakunda flooded the market.
While the Agriculture ministry repeatedly asked for price and distribution lists from SeedCo, the company never availed them, it was reported.
The syndicate allegedly gave preferential treatment to Cabinet ministers and senior government officials who received huge amounts of inputs on a loan basis, but the majority have defaulted on repayments, and there is a possibility that some of the inputs were diverted to dodgy destinations.
The Auditor General’s report lends support to this, noting that Treasury “did not avail evidence that the value of inputs procured were disbursed (sic) and reconciled to the loan amount and that the inputs were delivered to GMB depots for distribution to intended beneficiaries”.
Sakunda should not have been involved in both the procurement and distribution of inputs as that undermined transparency and accountability, noted Chiri.
Tagwirei was given the chance to respond to the allegations, but he ignored several messages to his phone and did not pick up calls on numerous occasions.
SeedCo head of public relations and communications Marjorie Mutemererwa reneged on her promise to respond to emailed questions despite repeated reminders and her own reassurances to do so.
Exiled ex-minister, Jonathan Moyo, has tweeted alleging that the command agriculture scheme was used to fund the military takeover that installed Mnangagwa as president two years ago.
“There was no evil greater than command agriculture, which was used to steal billions from the people of Zimbabwe through fraudulent TBs to bankroll a military coup… Billions were stolen from the programme via fraudulent Lacoste (alleged Mnangagwa Zanu PF faction) TBs issued by (former Finance minister Patrick) Chinamasa and via Sakunda’s overcharging farmers for fuel, seed, and fertiliser and chemical inputs,” he tweeted.
Taxpayers are likely to meet the cost of the alleged mega-million fraud and repayment defaults as investigations established that at least 40% of the beneficiaries defaulted.
Mnangagwa is one of the beneficiaries, who also include Cabinet ministers, high-ranking public service officials, ruling Zanu PF politicians and senior and mid-ranking security sector employees who aided in Mugabe’s removal in November 2017.
Information, Media and Broadcasting Services permanent secretary Nick Mangwana responding on behalf of the ministry of Agriculture, told The Standard that an estimated 60% of command agriculture beneficiaries had paid back the money.
Contracted farmers were required to commit five tonnes per hectare towards repayment of advanced loans in the form of irrigation equipment, seed, chemicals, mechanised equipment, electricity and water and retain the surplus.
Currently, defaulters cannot be subjected to criminal prosecution after the Parliamentary Legal Committee issued an adverse report on Statutory Instrument 79 of 2017 that sought to do so, and recovery of loans can only be done through cumbersome and lengthy civil processes.
The bulk of the beneficiaries of the programme were Zanu PF politicians who constitute 70% of the defaulters, while the remaining 30% were small-scale farmers, it was established.
In her report, Chiri stated that, because the programme was poorly administered with no proper recovery systems, the loans might not be recovered at all.
Previously, in the 2016-2017 farming season, only $94 753 was recovered, reflecting a recovery rate of 1%.
According to the agreement, farmers were given inputs through GMB and agents seconded by Sakunda Holdings and there should have been a stop order facility to ensure repayment at harvest time.
But investigations have revealed that GMB did not bill most politically connected farmers, especially those in position of authority.
To compound matters, GMB did not have documentation of what was supposed to be billed to each farmer against the inputs they received.
Top military officers and senior government officials got top-of-the-range luxurious vehicles under the scheme, while technical staff and ground staff had nothing to use.
Finance minister Mthuli Ncube admitted the default rate was high and promised to hunt down the defaulters through the principal bank, Agribank.
“We are very much keen to recover every cent that was spent on this programme. Going forward, we are saying, let the banks deal with farmers on a commercial basis. The banks and other financiers (must) come on board with full legal instruments to protect their money,” Ncube told The Standard.
He said government had blacklisted farmers who had not paid back money for inputs.
When Ncube took over as Finance minister in 2018, he stopped government funding of the programme, insisting that private players must directly deal with farmers.
Farmers have also been accused of stealing and selling command agriculture inputs.
At the height of Zanu PF factional fights between 2014 and 2017, command agriculture was used as a trump card for Mnangagwa under whose office it was run.
Biti, the PAC chairperson, said his committee was taking the reports of price manipulation seriously and would institute investigations.
“This is part and parcel of state capture and grand corruption, which as Zimbabweans, we must reject,” he said.
